What changed in this filing

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Item 1A. Risk Factors

2022-02-25 compared with 2021-02-26 · 125 added, 76 removed, 196 unchanged (51% of the section changed)

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The Merchant Marine Act of 1920 (commonly referred to as the Jones Act) regulates all interstate and intrastate marine commerce within the U.S.

If the Jones Act was to be repealed, substantially amended, or waived and, as a consequence, competitors were to enter the Hawaii or Alaska markets with lower operating costs by utilizing their ability to acquire and operate foreign-flagged and foreign- built vessels and/or being exempt from other U.S.

If the Jones Act were repealed, substantially amended or waived and, as a consequence, competitors were to enter the Hawaii or Alaska markets with lower operating costs by utilizing their ability to acquire and operate foreign-flagged and foreign- built vessels and/or being exempt from other U.S.

regulations, the Company’s business would be adversely affected.

In addition, the Company’s position as a U.S.

citizen operator of Jones Act vessels would be negatively impacted if periodic efforts and attempts by foreign interests to circumvent certain aspects of the Jones Act were ever successful.

If maritime cabotage services were included in the General Agreement on Trade in Services, the United States-Mexico-Canada Agreement, the U.S.-EU Trade Agreement or other international trade agreements, or if the restrictions contained in the Jones Act were otherwise altered, the shipping of cargo between covered U.S.

ports could be opened to foreign-flagged or foreign- built vessels and could have other adverse impacts.

citizen operator of Jones Act vessels would be negatively impacted if periodic efforts and attempts by foreign interests to circumvent certain aspects of the Jones Act were successful.

If maritime cabotage services were included in the General Agreement on Trade in Services, the United States-Mexico-Canada Agreement, or other international trade agreements, or if the restrictions contained in the Jones Act were otherwise altered, the shipping of cargo between covered U.S.

ports could be opened to foreign-flagged or foreign- built vessels and could have other adverse impacts to our business.

In the past, the Prime Minister of the United Kingdom has suggested that the Jones Act should be a topic of trade negotiations between the U.S.

and European Union.

and the United Kingdom.

The Company’s business would be adversely affected if the Company were determined not to be a U.S.

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citizen under the Jones Act.

citizens were able to defeat such articles of incorporation restrictions and own in the aggregate more than 25 percent of the Company’s common stock, the Company would no longer be considered as a U.S.

citizen under the Jones Act.

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Risks Related to the Company’s Operations

The Company’s results of operations have been adversely affected and could in the future be materially adversely impacted by the COVID-19 pandemic and its related economic effects.

The COVID- 19 pandemic has harmed the U.S.

and global economies, shut down or limited many business operations and disrupted manufacturing, supply chains, travel, drayage of containers, and transportation of goods.

In the United States and in many other countries worldwide, public health officials and state and local governments have recommended or mandated precautions to mitigate the spread of COVID- 19.

Changes in economic conditions or governmental policies, including from the COVID-19 pandemic, have affected and could in the future affect the Company.

The transportation industry in which the Company operates has been impacted by fluctuations, volatility, downturns, inflation, recessions and other economic shifts or market instabilities, as well as the development of and changes in governmental policies and relations, across the jurisdictions in which it operates.

These adverse economic conditions may also impact customers’ business levels and needs.

Within the United States, a weakening of economic drivers in Hawaii and Alaska, which include tourism, military spending, construction, personal income growth and employment, the weakening of consumer confidence, market demand, and the economy in the U.S.

Mainland, inflation, and the effect of a change in the strength of the U.S.

dollar against other foreign currencies may reduce the demand for goods, adversely affecting inland and ocean transportation volumes or rates.

In addition, overcapacity in the global or transpacific ocean transportation markets, a change in the cost of goods or currency exchange rates, pressure from U.S.

or foreign governments, imposition of tariffs and uncertainties regarding tariff rates or a change in international trade policies could adversely affect freight volumes and rates in the Company’s China service.

Since March 2020, the COVID- 19 pandemic has harmed the U.S.

and global economies, shut down or limited many business operations, led to port closures, and disrupted manufacturing, rail services, supply chains, travel, drayage of containers and transportation of goods for extended periods of time.

In the United States and in many other countries worldwide, public health officials and state and local governments have recommended or mandated a range of precautions to mitigate the spread of COVID- 19 and its variants as they evolve and fluctuate in their global impacts.

The full impact of such disruptions on the Company’s business remains uncertain.

The pandemic has severely reduced tourism and is expected to continue to limit tourism in the markets the Company serves, including Hawaii, Guam and Alaska, and has led to reduced demand for freight that the Company would otherwise carry.

The pandemic and related uncertainties and restrictions have previously reduced tourism in the markets the Company serves, including Hawaii, Guam and Alaska, and led to increased unemployment and weakened consumer demand in certain segments, including reduced demand for freight that the Company would otherwise carry in those tradelanes.

Fluctuations in the price of oil and reduced demand from the decline in air or car travel in response to COVID-19 could further impact the Alaskan economy, which in turn could impact the Company’s business.

In addition, the global macroeconomic effects of the pandemic and related impacts on the Company’s customers’ business operations, including financial difficulties or bankruptcies, may persist for an indefinite period, even after the pandemic has subsided.

In the Company’s China service, as a result of the pandemic, the Company has experienced increased demand for its expedited ocean services.

however, as the pandemic subsides and supply and demand trends normalize, it is uncertain whether the high volumes and rates the Company has seen can be maintained in the future.

In addition, the high volumes of freight from China have contributed to an industry-wide shortage of containers and chassis and congestion at U.S.

West Coast ports.

As the pandemic subsides, supply and demand trends normalize and supply chain congestion eases, the high volumes and rates the Company has experienced will eventually decline, but the Company cannot predict the timing or size of such decline.

These declines will reduce revenues, but certain fixed costs will remain.

For example, the Company cannot terminate leases early for chartered vessels in the CLX+ service.

The high volumes of freight from China and supply chain congestion at U.S.

West Coast ports have contributed to an industry-wide shortage of containers and chassis, resulting broadly in delays, backlog, limited throughput, cancelled sailings, and service interruptions within tradelanes and supply chains, as well as long lead times for new equipment.

There have also been labor shortages at U.S.

ports related to record cargo volume and outbreaks of COVID-19.

If the Company cannot secure sufficient equipment or unload vessels on a timely basis to meet customer’ needs and schedules, customers may seek to have their transportation and logistics needs met by others on a temporary or permanent basis.

The Company’s operations have also been impacted.

The Company’s employees are also restricted in their ability to travel.

The Company may be further impacted if its employees are otherwise unable to perform their duties, including mariners aboard our vessels, or if the Company’s terminals are temporarily closed due to a COVID-19 outbreak.

Some vessel dry-dockings could also be delayed or become more expensive if shipyards are unable to accommodate demand or obtain parts or if necessary personnel are not allowed to travel to the shipyards.

Due to the continuing uncertainty around the duration, breadth and severity of the COVID-19 pandemic, including the potential for resurgences or mutations of the virus, the actions taken to contain the virus or treat its impact, including the availability, distribution, efficacy and public acceptance of vaccines, and the impact of economic stimulus measures, the ultimate impact on the Company’s business, financial condition, operating results or cash flows cannot be reasonably estimated at this time.

ports related to record cargo volume, the overall employment environment and wage pressures, and outbreaks of COVID-19 which has also contributed to supply chain and port congestion.

If the Company cannot secure sufficient equipment or labor, or unload vessels on a timely basis to meet customers’ needs and schedules, customers may seek to have their transportation and logistics needs met by others on a temporary or permanent basis.

The Company’s operations have also been impacted by the pandemic.

The Company’s employees are restricted in their ability to travel.

The Company may be further impacted if its employees, including mariners aboard our vessels, are otherwise restricted from or unable to perform their duties, or if the Company’s or SSAT’s terminals are temporarily closed due to a COVID-19 outbreak.

Some vessel dry-dockings could also be delayed or become more expensive if shipyards are unable to accommodate demand or obtain parts in a timely manner or if necessary personnel are not allowed to travel to the shipyards.

Due to the continuing uncertainty around the duration, breadth and severity of the COVID-19 pandemic, including resurgences or mutations of the virus and the actions taken to contain the virus or treat its impact, including the

availability, distribution, efficacy and public acceptance of vaccines, the ultimate impact on the Company’s business, financial condition, operating results or cash flows are difficult to predict with certainty at this time.

Additional or unforeseen effects from the COVID-19 pandemic may give rise to additional risks or instigate or amplify the other risks described throughout these Risk Factors.

Changes in economic conditions or governmental policies have resulted in a decrease in consumer confidence and market demand for the Company’s services and products in certain markets and have adversely affected the Company’s financial position, results of operations, liquidity, or cash flows.

Within the U.S., a weakening of economic drivers in Hawaii and Alaska, which include tourism, military spending, construction starts, personal income growth and employment, the weakening of consumer confidence, market demand, and the economy in the U.S.

Mainland, and the effect of a change in the strength of the U.S.

dollar against other foreign currencies, have reduced the demand for goods, adversely affecting inland and ocean transportation volumes or rates.

For example, the uncertainties regarding the COVID-19 pandemic and other restrictions have severely decreased tourism, weakened consumer demand in certain segments, increased unemployment, and contributed to an economic downturn in the U.S., impacting freight volumes and revenues.

The decline in the price of oil due to the oil trade wars and reduced demand from the decline in air or car travel in response to COVID-19 will further impact the Alaska economy, which in turn could impact the Company’s business.

In addition, overcapacity in the global or transpacific ocean transportation markets, a change in the cost of goods or currency exchange rates, imposition of tariffs and uncertainties regarding tariff rates, or a change in international trade policies could adversely affect freight volumes and rates in the Company’s China service.

The shipping industry is competitive, and the Company has been impacted by new or increased competition.

The Company may face new competition by established or start-up shipping operators that enter the Company’s markets.

The shipping industry is competitive with limited barriers to entry as ocean carriers can shift vessels in and out of tradelanes or charter vessels to manage capacity and meet customer demands.

For example, in May 2020, the Company’s major competitor in the China service upsized its expedited service from China to the U.S.

The shipping industry is competitive with limited barriers to entry, especially in international tradelanes.

Ocean carriers can shift vessels in and out of tradelanes or charter vessels to manage capacity and meet customer demands.

For example, in 2020 and 2021, in response to rising demand, several new carriers entered the China tradelane in competition with the Company’s China service.

The entry of a new competitor or the addition of new vessels or capacity by existing competition on any of the Company’s routes could result in a significant increase in available shipping capacity that could have an adverse effect on the Company’s volumes and rates.

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The Company’s business relies on its relationships with the U.S.

military, freight forwarders, large retailers and consumer goods and automobile manufacturers, as well as other larger customers.

military, freight forwarders and non- vessel owning common carriers, large retailers and consumer goods manufacturers, as well as other larger customers.

For more information regarding the Company’s significant customers, see the discussion in Part I, Item 1 of this Annual Report.

The Company could also be adversely affected by any changes in the services, or changes to the costs of services, provided by third party vendors such as railroads, terminals, agents and shipping companies, including charter vessel owners.

The Company could also be adversely affected by any changes in the services, or changes to the costs of services, provided by third party vendors such as railroads, truckers, terminals, agents and shipping companies, including charter vessel owners.

Service structures and relationships with these parties are important in the Company’s intermodal business, as well as in the China, Guam, Micronesia, Japan, Alaska export and South Pacific services.

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The Company is dependent upon key vendors and third-parties for equipment, capacity and services essential to operate its business, and if the Company fails to secure sufficient third-party services, its business could be adversely affected.

The Company’s businesses are dependent upon key vendors who provide rail, truck and ocean transportation services.

The Company’s businesses are dependent upon key vendors who provide terminal, rail, truck, and ocean transportation services.

If the Company cannot secure sufficient transportation equipment, capacity or services from these third-parties at reasonable prices or rates to meet its or its customers’ needs and schedules, customers may seek to have their transportation and logistics needs met by others on a temporary or permanent basis.

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Effective January 1, 2020, the IMO imposed a world-wide regulation generally requiring that all ships burn compliant fuel oil with a maximum sulfur content of less than or equal to 0.5 percent.

Currently, LSFO is typically priced higher than HSFO due to the need for further oil refinement.

Currently, LSFO is typically priced higher than HFO due to the need for further oil refinement.

In some market instances, the prices between the two products could be inverted.

There is no guarantee that the Company’s contracts to secure LSFO on the U.S.

There is no guarantee that the Company’s contracts to secure LSFO or HFO on the U.S.

West Coast will secure quantities in sufficient amounts and at a reasonable cost.

In addition, prolonged use of LSFO on some Matson vessels could degrade engine performance or lead to higher maintenance costs.

There may also be delays or other unexpected complications in connection with Matson’s announced plans to install a scrubber on at least one additional vessel.

In addition, prolonged use of LSFO on some

Matson vessels could degrade engine performance or lead to higher maintenance costs.

The Company’s ability to recover the higher costs of IMO 2020 compliant fuel through fuel- related surcharges, the availability of LSFO, and the potential impact on vessel performance may adversely affect the Company’s operations, business and profit.

The Company’s operations are susceptible to weather, natural disasters, maritime accidents, spill events and other operating risks.

The Company’s operations are vulnerable to disruption as a result of weather, natural disasters and other climate-driven events, such as bad weather at sea, hurricanes, typhoons, tsunamis, floods and earthquakes, as well as a maritime accident, oil or other spill, or other environmental mishap.

Evolving stakeholder expectations related to environmental, social and governance (“ESG”) matters exposes the Company to heightened scrutiny, additional costs, operational challenges and a number of risks.

Investors, advisory firms, employees, customers, suppliers, governments and other stakeholders are increasingly focused on, and establishing expectations for, ESG matters and related corporate practices, disclosures and initiatives.

These evolving expectations may impact the Company’s reputation, business and attractiveness as an investment, employer or business partner to the extent the Company – including its initiatives, goals and reporting – meets or is perceived to meet those expectations, including as a result of any third-party rating or assessment.

The adoption and expansion of ESG-related legislation and regulation have also resulted and may again result in increased capital expenditures and compliance, operational and other costs to the Company.

The Company’s public disclosures on its climate, sustainability, human capital and other ESG initiatives include its goals or expectations with respect to those matters, including greenhouse gas (“GHG”) emission reduction targets.

These disclosures are aspirational and based on standards and frameworks for presenting and measuring progress that are not harmonized and are still developing, assumptions that may change, and disclosure controls and procedures that continue to evolve.

The Company’s initiatives and goals may not be favored by certain stakeholders and could impact the attraction and retention of investors, customers and employees, as well as the Company’s willingness to do business with other companies or customers.

Efforts to achieve the Company’s initiatives and goals face numerous risks and may be unsuccessful, result in additional costs or experience delays, and as a result may have a material negative impact on the Company, including its brand, reputation and stock price.

The Company may not be timely or successful in completing its fleet upgrade initiatives, which may result in significant costs and adversely impact the Company’s ability to meet its climate goals.

The Company’s four new Aloha and Kanaloa class vessels include dual fuel capable engines that can run on LSFO or liquefied natural gas (“LNG”).

In November 2021, the Company announced plans to install tanks, piping and cryogenic equipment on Daniel K.

Inouye and to re-engine Manukai to operate on LNG.

The Company also expects to begin LNG installations on Kaimana Hila , Lurline and Matsonia , and to build three new LNG-ready vessels.

In addition, the Company is in the process of building a new neighbor island flat-deck barge.

The Company anticipates making significant capital expenditures in connection with these fleet initiatives.

These initiatives may be hindered by substantial delays and long lead times for necessary equipment, including as a result of ongoing supply chain congestion, other residual impacts from the COVID-19 pandemic, increased demand across the industry for LNG installations and conversions, and new ship-building.

Additional operating costs may be incurred to the extent additional ships are needed to maintain schedule integrity while such updates and installations are performed.

Once completed, operation of these vessels may be slowed to the extent they present new maintenance requirements or unforeseen complications.

Use of LNG fuel may not result in anticipated GHG emission reductions, and the Company’s investments in LNG- ready vessels may be insufficient to meet the Company’s previously announced GHG emission reduction goals on a timely basis or at all.

There is no guarantee that the Company will be able to secure LNG via bunker barges or other methods on the U.S.

West Coast in sufficient amounts to fuel its vessels or at a reasonable cost, as increased demand for LNG could decrease available supply of LNG and increase prices.

Governments have in the past and may again in the future impose tariffs on LNG that also may increase supply costs.

As a result of these risks, the Company may not fully realize the benefits of these investments.

The Company’s operations are susceptible to weather, natural disasters, maritime accidents, spill events and other physical and operating risks, including those arising from climate change.

As a maritime transportation company, the Company’s operations are vulnerable to disruption as a result of weather, natural disasters and other climate-driven events, such as rising temperatures, sea levels and storm severity, bad weather at sea, hurricanes, typhoons, tsunamis, floods and earthquakes, as well as a maritime accident, oil or other spill, or other environmental mishap.

Climate change has increased and may continue to increase the frequency, severity and uncertainty of such events.

Such events interfere with the Company’s ability to provide on-time scheduled service, resulting in increased expenses and potential loss of business associated with such events.

In addition, severe weather and natural disasters can result in interference with the Company’s terminal operations and may cause serious damage to its vessels and cranes.

In addition, severe weather

and natural disasters can result in interference with the Company’s terminal operations and may cause serious damage to its vessels and cranes.

These impacts could be particularly acute in certain ports in Alaska where the Company is dependent on a single crane.

The Company’s vessels and their cargoes are also subject to operating risks such as mechanical failure, collisions and human error.

The occurrence of any of these events may result in damage to or loss of vessels, containers, cargo and other equipment, loss of life or physical injury to its employees or people, pollution and suspension of operations.

The occurrence of any of these events may result in damage to or loss of vessels, containers, cargo and other equipment, increased maintenance expense, loss of life or physical injury to its employees or people, pollution, or the slow down or suspension of operations.

These events can expose the Company to reputational harm and liability for resulting damages and possible penalties that, pursuant to typical maritime industry policies, it must pay and then seek reimbursement from its insurer.

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Finally, the Company retains all risk of loss that exceeds the limits of its insurance.

The Company may be impacted by transitional and other risks arising from climate change.

The Company may be impacted by transitional and other risks arising from climate change and the global shift toward a low carbon future.

Organizational, industrial and governmental shifts in operations as well as legal and regulatory requirements to reduce or eliminate emissions and/or increase efficiency may require the Company to increase expenditures, make changes to existing infrastructure, vessels and equipment and shift its business model.

For example, the maritime industry is moving toward deployment of clean energy technologies and use of electricity powered by renewable energy sources to power terminal operations as a way to reduce shoreside greenhouse gas emissions.

As the Company and SSAT increase their reliance on the power grid at terminals, including for cold-ironing and ground service fleets, the Company may experience increased risks related to power outages, brown outs or black outs.

The likelihood of these risks is compounded by uncertainties regarding the reliability of renewable energy sources as well as any increased frequency of extreme weather events that may disrupt the generation or transmission of electricity.

In addition, compliance with new climate change requirements or regulations such as the IMO’s requirements related to EEXI and CII could require Matson’s fleet to slow down if efficiency improvements or transitions to alternative fuels together are not enough to reduce GHG emissions sufficiently, thus impacting Matson’s expedited business model and competitive advantage.

New environmental requirements for vessel performance and operation could also require the Company to accelerate the building of new vessels, increase the construction costs for new vessels and equipment to accommodate even newer technology as it emerges while today’s technology becomes obsolete, initiate unexpected retrofit projects for existing vessels, retire older vessels earlier than expected, or render reserve vessels unusable.

If these outcomes were to occur, the Company’s business, results of operations, cash flows and financial condition could be adversely affected.

In addition to the COVID-19 pandemic, the Company faces risks related to actual or threatened health epidemics, pandemics or other major health crises, which could significantly disrupt the Company’s business.

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The Company’s significant operating agreements and leases could be replaced on less favorable terms or may not be replaced when they expire.

The significant operating agreements and leases entered into by the Company in its businesses, including those related to terminals, chartered vessels and warehouses as well as those with SSAT, expire at various points in the future and may not be replaced or could be replaced on less favorable terms, thereby adversely affecting the Company’s future financial position, results of operations and cash flows.

For example, on November 26, 2018, a wholly-owned subsidiary of the Company entered into agreements whereby Maunalei , a U.S.

flagged and Jones Act qualified vessel, was sold for $106.0 million and leased back from the buyer under an operating lease agreement.

The customary representations, warranties and covenants contained in the agreements do not eliminate the risks that (a) the lessor could lose its Jones Act status, (b) the Company could not replace Maunalei in the event it is no longer Jones Act eligible, or (c) if the repurchase option is elected, the Company would not be able to consummate the repurchase of Maunalei at the end of the lease term.

not be replaced with comparable assets with the specifications necessary for the Company’s or SSAT’s businesses or could be replaced on less favorable terms, thereby adversely affecting the Company’s future financial position, results of operations and cash flows.

The Company may face unexpected dry-docking or repair costs for its vessels.

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Unexpected dry-dockings or repairs could require the Company to activate a reserve vessel, purchase additional fuel and operate a less-efficient, smaller vessel for a period of time.

The Company also operates a number of

older active and reserve vessels that may require more frequent and extensive maintenance.

The cost of repairs are difficult to predict with certainty and can be substantial.

The Company also operates a number of older active and reserve vessels that may require more frequent and extensive maintenance.

The cost of repairs is difficult to predict with certainty and can be substantial.

In addition, the time when a vessel is out of service for maintenance is determined by a number of factors, including regulatory deadlines, market conditions, shipyard availability and customer requirements, and accordingly, the length of time that a vessel may be out of service may be longer than anticipated, which could adversely affect the Company’s business, financial condition, results of operations and cash flows.

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Significant additional upgrades and projects remain.

The Company has also begun discussions with state and local authorities in Anchorage, Alaska regarding upgrades to those terminal and port facilities.

Regulatory, construction or other delays or cost overruns related to the expansion and modernization of the terminals could have an adverse impact on the Company’s business plans, financial condition and results of operations.

The Company has also continued discussions with state and local authorities in Anchorage, Alaska regarding upgrades to those terminal and port facilities.

Regulatory, construction or other delays or cost overruns related to the expansion and modernization of the terminals could have an adverse impact

on the Company’s business plans, financial condition and results of operations.

In addition, the terminal modernization programs may not result in improved operational productivity or generate expected returns.

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A significant portion of Matson’s employees are covered by collective bargaining agreements.

Furthermore, the Company relies on the services of third- parties, including SSAT, that employ persons covered by collective bargaining agreements.

Furthermore, the Company relies on the services of third- parties, including SSAT, which employ persons covered by collective bargaining agreements.

For additional information on collective bargaining agreements with unions, see Item 1.C.

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The Company has been adversely affected by actions taken by employees of the Company or other companies in related industries against efforts by management of the Company or other companies to control labor costs, restrain wage or benefit increases or modify work practices.

Strikes and disruptions have occurred as a result of the failure of Matson or other companies in its industry to negotiate collective bargaining agreements with such unions successfully.

In addition, any slow-downs, strikes, lock-outs or other disruptions, including limits on the availability of labor through trade union hiring halls have had and in the future could have an adverse impact on Matson’s or SSAT’s operations.

Strikes, slow-downs and disruptions have occurred as a result of the failure of Matson or other companies in its industry to negotiate collective bargaining agreements with such unions successfully.

In addition, any slow-downs, strikes, lock-outs or other disruptions, including limits on the availability of labor through trade union hiring halls, have had and in the future, particularly in years when collective bargaining agreements are being negotiated, could have an adverse impact on Matson’s or SSAT’s operations.

Loss of the Company’s key personnel or failure to adequately manage human capital could adversely affect its business.

The Company’s future success will depend, in significant part, upon the continued services of its key personnel and skilled employees, including its senior management, as well as key personnel at its joint venture partners.

The permanent or temporary loss of the services of key personnel could adversely affect the Company’s future operating results because of such employees’ experience and knowledge of the Company’s business and customer relationships.

If key employees depart or are unable to work, the Company may incur significant costs to replace them.

Additionally, the Company’s ability to execute its business model could be impaired if it cannot replace such personnel in a timely manner.

The Company’s investments in and efforts to manage its human capital, including to maintain a desirable workplace culture, may not be successful in identifying, attracting, developing, motivating, retaining, competing for or replacing qualified personnel.

The permanent or temporary loss of the services of key personnel could adversely affect the Company’s future operating results because of such employees’ experience with and knowledge of the Company’s business and customer relationships.

If key personnel and skilled employees depart or are unable to work, the Company’s ability to execute its business model could be impaired to the extent it cannot replace such personnel or sufficiently train new personnel in a timely manner.

In addition, the Company may incur significant costs to replace these employees.

Company can meet its labor needs is subject to a variety of pressures, including market compensation and benefit levels, which may be impacted by pressure within the industry to increase wages, including due to the threat of a labor strike;

the availability of labor, which may be impacted by national and global labor trends including higher-than-normal levels of individuals leaving the workforce during COVID-19 and industry trends including aging workforces that may reduce the available pool of skilled workers;

a mismatch of skills or experience to support the evolving needs of the Company’s business;

and employee expectations or desire for changes in the work environment.

In addition, the Company’s workforce is aging, and within the next few years an increasing number of employees will be eligible to retire, which may result in a period of higher turnover rates than we have historically experienced and could amplify these challenges.

The Company does not maintain key person insurance on any of its key personnel.

The Company’s investments in and efforts to manage its human capital and maintain a desirable workplace culture, including to create a safe and healthy work environment, improve diversity and create a respectful, responsive and inclusive culture, and foster a rewarding workplace for employee development and advancement, may not be successful in identifying, attracting, developing, motivating, retaining, competing for or replacing qualified personnel.

These efforts and the Company’s reputation may also be impacted by any failure or perceived failure to meet or timely progress on publicly disclosed human capital-related goals and initiatives, including with respect to diversity, equity and inclusion, or to compare favorably with the progress or goals of its industry or peers.

In addition, the Company may be subject to federal, state or local vaccine or other COVID-19 related mandates (including as a U.S.

government contractor) and enforcement of such mandates may result in reputational harm, labor disruption and increased operating costs and impact the Company’s ability to attract and retain qualified talent, among other risks.

Risks Related to Information Technology

If the Company is not able to use the Company’s information technology and communications systems effectively, the Company’s ability to conduct business might be negatively impacted.

If the Company is not able to use its information technology and communications systems effectively, the Company’s ability to conduct business might be negatively impacted.

The Company is highly dependent on the proper functioning of our information technology systems to enable operations and compete effectively.

The Company regularly updates its information technology systems or implements new systems, which could cause substantial business interruption.

There is no assurance that the systems upgrades or new systems will meet our current or future business needs, or that they will operate as designed.

For example, the Company is in the midst of a multi-year process to implement a new enterprise resource planning, or ERP, system intended to enhance operating efficiencies and provide more effective management of its business operations.

There is no assurance that the systems upgrades or new systems will meet the Company’s current or future business needs, or that they will operate as designed.

For example, the Company recently completed a multi-year process to implement a new enterprise resource planning, or ERP, system intended to enhance operating efficiencies and provide more effective management of its business operations.

System enhancements are on-going.

The Company’s information technology systems also rely on third-party service providers for access to the Internet, satellite-based communications systems, the electric grid, database storage facilities and telecommunications providers.

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In the past, disruptions in the Company’s third-party service providers have impacted the Company’s operations, including the Company’s ability to book and manage freight, stow vessels, and process customs declarations.

In response to the COVID-19 pandemic and in compliance with guidance from public health officials and state and local governments, many of the Company’s employees are working from home or remotely, increasing the Company’s dependence on its information technology systems and third-party providers.

During periods where government and health officials recommended or required doing so in response to the COVID-19 pandemic, some of the Company’s employees worked from home or remotely, increasing the Company’s dependence on its information technology systems and third-party providers during that time.

If the Company’s information technology and communications systems experience reliability issues, integration or compatibility concerns or if the Company’s third-party providers are unable to perform effectively or experience disruptions or failures, there could be an adverse impact on the availability and functioning of the Company’s information technology and communications systems, which could lead to business disruption or inefficiencies, reputational harm or loss of customers.

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The Company recorded significant intangible assets related to goodwill, customer relationships and trade name arising from the Span Alaska acquisition.

The Company is required to test goodwill for impairment annually, or whenever events or changes in circumstances indicate that it is more likely than not that the fair value of a reporting unit is less

than its carrying amount.

Factors that could lead to an impairment of goodwill or intangible customer relationships include any significant adverse changes affecting the reporting unit’s financial condition, results of operations, and future cash flows.

Factors that could lead to an impairment of goodwill or intangible customer relationships include any significant adverse changes affecting the reporting segment’s financial condition, results of operations, and future cash flows.

A deterioration of the Company’s credit profile, disruptions of the credit markets or higher interest rates could restrict its ability to access the debt capital markets or increase the cost of debt.

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Furthermore, the Company incurs interest under its revolving credit facilities based on floating rates.

Floating rate debt creates higher debt service requirements if market interest rates increase, as was the case in connection with the U.S.

Federal Reserve’s interest rate increases in 2018, which would adversely affect the Company’s cash flow and results of operations.

In addition, as the floating rate on certain borrowings under the Company’s revolving credit facility is tied to LIBOR, the uncertainty regarding the future of LIBOR as well as the transition from LIBOR to an alternate benchmark rate or rates could pose funding risks for the Company and adversely affect the Company’s financing costs.

Floating rate debt creates higher debt service requirements if market interest rates increase, as may be the case in connection with the U.S.

Federal Reserve’s announced plans to increase interest rates in 2022, which would adversely affect the Company’s cash flow and results of operations.

In addition, the floating rate on certain borrowings under the Company’s revolving credit facility is tied to LIBOR.

Regulators in the United States and other countries have begun to phase out the use of LIBOR, with a complete phase out of U.S.

dollar LIBOR rates currently expected by June 2023.

Uncertainty regarding the transition from LIBOR to an alternate benchmark rate or rates could pose funding risks for the Company and adversely affect the Company’s financing costs.

Disruptions to the credit markets as a result of the COVID-19 pandemic or other macroeconomic or financial market developments could increase the Company’s cost of capital and limit the Company’s access to capital.

Failure to comply with certain restrictive financial covenants contained in the Company’s credit facilities could preclude the payment of dividends, impose restrictions on the Company’s business segments, capital resources or other activities or otherwise adversely affect the Company.

The Company’s credit facilities contain certain restrictive financial covenants, the most restrictive of which include a maximum ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”), a minimum ratio of EBITDA to interest expense, certain prohibitions on additional priority debt, certain prohibitions on sale leaseback transactions, and the maintenance of minimum shareholders’ equity.

The Company’s credit facilities contain certain restrictive financial covenants, the most restrictive of which include a maximum ratio of debt to earnings before interest, taxes, depreciation and amortization (“EBITDA”), a minimum ratio of EBITDA to interest expense, certain prohibitions on additional priority debt, certain prohibitions on sale and leaseback transactions, and the maintenance of minimum shareholders’ equity.

If the Company does not maintain these and other required covenants, and a breach of such covenants is not cured timely or waived by the lenders, resulting in a default, the Company’s access to credit may be limited or terminated, dividends may be suspended, and the lenders could declare any outstanding amounts due and payable.

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changes in the mix of earnings among countries with varying tax rates;

changes to the allowable amounts of foreign derived intangible income deductions;

and acquisitions and changes in the Company’s corporate structure.

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The amount of the Company’s employee pension and post-retirement benefit costs and obligations is calculated on assumptions used in the relevant actuarial calculations.

Adverse changes in any of these assumptions due to economic or other factors, changes in discount rates, higher health care costs, or lower actual or expected returns on plan assets, may

adversely affect the Company’s operating results, cash flows, and financial condition.

Adverse changes in any of these assumptions due to economic or other factors, changes in discount rates, higher health care costs, or lower actual or expected returns on plan assets, may adversely affect the Company’s operating results, cash flows, and financial condition.

In addition, a change in federal law, including changes to the Employee Retirement Income Security Act or Pension Benefit Guaranty Corporation premiums, may adversely affect the Company’s single-employer and multi-employer pension plans and plan funding.

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air emissions;

use of shore power at California ports;

wastewater discharges;

management of storm water;

the transportation, handling and disposal of solid and hazardous materials, oil and oil- related products, hazardous substances and wastes;

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and climate change, including any regulations, mandates or restrictions related to greenhouse gas emissions, such as a “cap and trade” system of allowances and credits, and energy use.

For a discussion of specific laws and regulations, see Part I, Item 1, of this Annual Report.

Any changes in applicable laws and regulations, including their enforcement or interpretation, as well as any new laws and regulations that are adopted, including as a result of the recent change in U.S.

Presidential Administration, could impose significant additional costs and limitations on the Company’s ability to operate.

Any changes in applicable laws and regulations, including their enforcement, interpretation or implementation that results in more stringent requirements than currently anticipated, as well as any new laws and regulations that are adopted could impose significant additional costs and limitations on the Company’s ability to operate.

Mitigation strategies or contingency plans to remain in compliance with applicable laws and regulations may be unsuccessful, result in additional costs or experience delays.

Such costs may not be recoverable through increased payments from customers.

These laws and regulations require us to obtain certificates of financial responsibility and to adopt procedures for oil and hazardous substance spill prevention, response and clean up, among other requirements impacting the Company’s business.

In complying with applicable laws and regulations, the Company has incurred expenses and may incur material future costs and expenses related to vessel and equipment modifications, new equipment, higher-priced fuel, changes in operating practices and procedures, tracking emissions, changing routes, installing scrubbers, adopting or modifying energy sources and undergoing additional oversight inspections, all of which could adversely affect the Company’s business and financial condition.

For a discussion of specific laws and regulations, see Part I, Item 1, of this Annual Report.

Federal, state and local laws and regulations require us to obtain certificates of financial responsibility and to adopt procedures for oil and hazardous substance spill prevention, response and clean up, among other requirements impacting the Company’s business.

In complying with applicable laws and regulations, the Company has incurred expenses and may incur material future costs and expenses related to vessel and equipment modifications, new equipment, higher-priced fuel, changes in operating practices and procedures, tracking emissions, changing routes, adopting or modifying energy sources and undergoing additional oversight inspections, all of which could adversely affect the Company’s business and financial condition.

For example, Matson’s vessels operate within emissions control areas, and the Company’s U.S.

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The Company is subject to, and may in the future be subject to, disputes, legal or other proceedings, and government inquiries or investigations that could have an adverse effect on the Company.

The nature of the Company’s business exposes it to the potential for disputes, legal or other proceedings, and government inquiries or investigations relating to antitrust matters, labor and employment matters, personal injury and property damage, environmental and other matters, as discussed in the other risk factors disclosed in this section or in other Company filings with the SEC.

The nature of the Company’s business exposes it to the potential for disputes, legal or other proceedings, and government inquiries or investigations relating to antitrust matters, labor and employment matters, personal injury and property damage, environmental, shore power and other matters, as discussed in the other risk factors disclosed in this section or in other Company filings with the SEC.

For example, Matson is a common carrier, whose tariffs, rates, rules and practices in dealing with its customers are governed by extensive and complex foreign, federal, state and local regulations, which may be the subject of disputes or administrative or judicial proceedings.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors